Business over Tapas 6 July 2017 Nº 216

With monoculture – the practice of planting a single, extended crop – comes a higher profit, but at the same more risk. The gigantic and extended olive tree population of Spain could become the next cash-crop to be in danger. As Iberia Naturesays, ‘...Spain is by some way the country with the highest number of olive trees (more than 300 million), in the world and is nowadays the world's leading olive and olive oil producer and exporter.

Of the 2.1 million hectares (5.19 million acres) of olive groves, 92% are dedicated to olive oil production...’. Now, according toEl Periódico, a destructive bacteria, known disturbingly as ‘the Ebola of the Olive Tree’, has been found in a Valencia plantation in Guadalest, Alicante. The bacterium spreads rapidly and dries out the trees by inhibiting the passage of the sap. The ecologists are working hard to contain the outbreak of xylella fastidiosa, while being aware that the olive oil business in Spain is worth at least 1,886 million euros annually. Worse still, the plague doesn’t only attack the olive trees; it also will also kill citrus trees, plum, peach, almonds and grape-vines.

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Housing:

‘The Spanish real estate market is experiencing a new boom, this time in the rental sector. The average rent for new leases has risen 20.9% over the last year, according to leading industry website Idealista. And cities like Madrid and Barcelona saw record average prices...’ From El País in Englishhere.

‘When buying an apartment in Spain, or a house which forms part of a development, you will often hear talk of a “Communidad de Propietarios” or “Community of Property Owners” and the service charges that can form part of the running costs of owning a property in Spain. What is this mysterious “community”? And how does it impact upon you as a property owner?...’. A Place in the Sun explains here.

Another bank, this time the BBVA, is putting up almost 2,000 homes spread across Spain at bargain prices in an attempt to straighten their books. Sale prices, says Expansiónhere, of up to 60% off!

‘Why it doesn’t pay to own property in Spain through a company’, an interesting article from International Adviserhere.

Mark Stücklin of Spanish Property Insight explains here how the old ‘off plan’ system often turned into something toxic for buyers: ‘The off-plan property boom was like a Ponzi scheme that lulled buyers into false sense of security’.

Around a hundred homes, owned almost exclusively by Britons, have been threatened for years with demolition. The homes, in Albox, Almería, were built in an ‘illegal’ urbanisation in El Romeral-La Aljambra between 2004 and 2006. The public prosecutor was in court this week seeking their demolition. Few of the houses are inhabited as they were never connected to water or electricity. The story at Almería Hoyhere. The court later agreed that the houses could stay (Canal Sur TV clip here).

FromTypically Spanish: ‘A time-share scam led to 500 British families being defrauded of as much as 3,000 € each. There are 36 arrests, among them several members of a lawyer’s office who had collaborated with the money laundering. Agents from the National Police have dismantled an organisation led by a Englishman who has accused of defrauding, according to the detectives’ calculations, of more than 500 British families via a massive time-share fraud - sharing ownership of property for several weeks of the year...’.

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Tourism:

Spain has a new tourist slogan: ‘Spain is part of you’. You can admire it at Nexoturhere.

Foreign visitors to Spain spent 28,235 million euros in the first five months of this year, an increase over 2016 of 14.7% more. The average spend per tourist was 987€. The details come from Agent Travelhere.

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Seniors:

The president of the Andalusian Government, Susana Diaz, has made it clear that her position is to let the high inheritance tax levied in the region to die. For two reasons, she says, because her intention is to fulfil the parliamentary agreement with Ciudadanos relative to this tax and secondly because she believes that this tribute has suffered "a process of de-legitimisation," in which both fair and unfair arguments have been used. In this way, Díaz, in a meeting organized Monday by the Cadena Ser in Seville, said that she will be reforming the tax...’. The Andalucía succession tax is the highest in Spain. The report comes from the Diario de Sevillahere.

According to an economist called Miquel Puig, mass tourism doesn’t make a community wealthier. He says ‘..."The per capita income of the Balearic Islands is much lower than the per capita income of the province of Lleida, for example, and thirty years ago this was not the case. You see, the Balearic Islands have bet heavily on tourism, which has grown enormously, but their income per capita has not improved compared to other territories that do not have so many visitors. The examples are illustrative: one of the regions with the most tourism in Spain with another that does not fight for the top ten. In addition, also in employment, the figures are better in Lleida than in the Balearics.

Where is the trick? How have we been persuaded that tourism is the goose which lays the golden eggs? Well, the trick is that "tourism pays the workers very badly" so that the wealth ends up only in the hands of a few. In fact ... the average annual salary of those working in tourist accommodation is 21,869 euros per year (less than the per capita GDP of Spain). In the case of those working in restaurants or bars, the figure falls to 13,490 a year and 12,592 if you are a woman...’. The article comes from Playgroundhere.

Following its acquisition by the Santander, the Banco Popular has suffered an ERE, a thinning of its staff, by 2,592 persons. Story at Europa Presshere.

From the Elcano Royal Institute. ‘Global Spain: the country’s economic, military and soft presence’. The lengthy study begins with a summary: ‘Almost 500 years since Juan Sebastián Elcano completed the first circumnavigation of the world and a vast empire was created, Spain has re-built a substantial but very different global presence. The Elcano Global Presence Index, first calculated for 1990 and which now covers 100 countries, measures this presence using objective data. The Index is based on three variables –economic, military and soft– and ranks Spain 12th. The country paid a high price during its Great Recession, which ended in 2013, although it did not regain the pre-crisis 2008 GDP level until the second quarter of this year, but one area –internationalisation– was hardly affected. The direct investment abroad of Spanish companies remains strong and exports of goods and services have surged. As regards its soft presence, the country successfully absorbed some 6 million migrants and tourism continued to set new records every year. Official development cooperation, however, has declined, while the military presence has held up, although it accounts for a smaller share of the global presence’.

What’s happening to Uber? The Corner takes a look here: ‘...Uber had been spreading its business across Europe mostly without a hitch, until it reached Spain. This country’s transport laws are more restrictive than most when it comes to companies like Uber and its Spanish rival Cabify. Those firms’ drivers use so-called VTC permits and Spanish legislation states that only one of these permit holders can be on the road for every 30 regular taxis...’.

Contracts for a quarter of all new jobs in Spain last for less than seven days, says a gloomy article at El Confidencialhere. Put another way, ‘...of the 1.5 million temporary jobs signed in April, 426,035 lasted less than a week...’. In all, 43% lasted less than a month.

Joan Rosell, the president of the employers association the CEOE, says that he admits that it is ‘impossible’ to make it to the end of the month on 800€. Lower paid workers are likely to see modest wage increases in the coming months. El Diario has more.

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Politics:

FromEl Español: ‘Felipe VI 'forces' Rajoy to call Sanchez’. The President has a poor opinion of Sánchez (‘no means no’) and had saved him up until this Thursday, 46 days after the socialist primaries. ‘...Mariano Rajoy still considers Pedro Sánchez a "Martian" who has broken the rules of the political game and prefers Pablo Iglesias as the interlocutor on the left...’. Their previous meeting was in late August last year, a meeting which Sánchez described as ‘perfectly useless’. Sánchez had been received by the King at the Zarzuela Palace on Tuesday.

El Diarioasks – should Sánchez be looking to cosy up with Podemos... or with the Podemos voters...?

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Corruption:

84% of the electorate feels that the Partido Popular is not doing all it could to fight against corruption, says a report in El Confidencialhere.

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Catalonia:

‘Catalonia will declare independence "immediately" if the region's voters opt to separate from Spain in a referendum, its ruling coalition said Tuesday as it unveiled a bill aimed at ensuring the vote takes place despite Madrid's refusal. "If the majority of votes are for creating a Catalan republic, obviously independence will have to be declared immediately," said Gabriela Serra, a member of the separatist coalition that governs Catalonia...’. The report comes from The Localhere. The referendum will be held (probably... perhaps... maybe...) on October 1st.

‘Splits in Catalonia's pro-independence campaign before key vote. Catalan president criticised after minister sacked for admitting that Spain could block planned referendum on independence. Divisions have emerged within Catalonia’s pro-sovereignty movement after a minister in the regional government was sacked for suggesting that this autumn’s controversial independence referendum would probably not go ahead because of fierce opposition from the Spanish government...’. From The Guardianhere. The substitute for the outgoing minister Jordi Baiget is Santi Vila, who was quick to swear undivided loyalty... (Item from El Huff Posthere).

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Courts:

According toDigital Sevilla, the Junta de Andalucía was 'too busy' to make it to court for the Caso Nevada and has accepted to pay instead the 157 million euros indemnification claimed by the plaintiff over a withdrawn building licence.

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Brexit:

According toEl Confidencial, the Registro Civil can no longer accept petitions for Spanish nationality, with a new system from July 1st involving making a petition through the Internet. This is meant to help ‘speed things up’. More information here.

La Razón is a right-wing newspaper and here in ‘The Xenophobia of Brexit’ it talks of anti-Spanish racism in London. «Jodida española, vete a casa».

‘Spaniards in the UK: not just waiting tables. Over half of Spanish workers in country are in health, education and finance, new study shows’. Headline at El País in Englishhere.

The UK wants to agree an ‘open-skies’ policy with Europe says Preferentehere. Once again, one wonders why they’re leaving...

FromThe Office of National Statistics: ‘Living abroad: migration between Britain and Spain. The first in a series being published to provide more information on British citizens living in the European Union (EU), and EU citizens living in the UK’.

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Media:

A web-page that got lots of funding, but no one ever visited. This was a ‘zombi-webpage’ called El Pulso. It disappeared completely the day a report came out on funding by the Madrid Community (after pocketing 240,000€ in advertising). The story at El Diariohere.

FromTelecompaper: ‘The Spanish government has approved a new decree allowing it to tax any digital reproduction device that replaces the previous private copying levy declared illegal by the Court of Justice of the European Union (ECJ). Under the terms of the new proposal the government can charge a levy of EUR 0.21 for blank DVDs, EUR 1.10 for smartphones, EUR 3.15 for tablets and EUR 12 for hard drives and SSD units...’. This is just about the same as the previous canon digital which was deemed illegal by the EU, with a re-working of the legal detail and, interestingly, the tax will not be paid by town halls and other public agencies (more detail at El Diariohere). Here’s an idea, how about a tax on spray paint – to help pay for removing graffiti?

A prize-winning independent journalist, Alberto Arce, writes about how difficult it is to earn a crust in the industry. He has a point as the Editor of Business over Tapas knows...

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The Migrant Crisis

by Andrew Brociner

The hot weather has seen a dramatic increase in the number of people attempting to cross the Mediterranean seeking refuge in Europe. Italy, the main recipient of this influx, has seen an astonishing amount of migrants recently – 83,650 so far this year, an increase of 20% over last year at this time. Italy's intake is 86% of the total number of Mediterranean migrants. Two weeks ago, a staggering 12,600 migrants reached Italian shores during the weekend alone. Sadly, 2,030 have lost their lives this year.

Understandably, Italy is at saturation point and has asked the EU to intervene, requesting that the burden be shared by more countries. The talks between Italy and the EU are ongoing. Most migrants, who start from various African countries, such as Guinea and Nigeria, cross from Libya, as it is close to Lampedusa and Sicily. The Italian coastguard organizes rescue operations, but some non-profit organizations are part of the rescue too. Italy is now threatening to deny right of port to those flying foreign flags if other EU countries do not cooperate and share the burden of responsibility. Italy has even accused these NGOs of colluding with the migrants to take them to safe havens, thus contributing to the influx. The reaction from the EU commissioner for migration has been very favourable so far, calling Italy's response to the crisis exemplary.

It is interesting to note that the countries most affected by the enormous rise in migrants and refugees, notably Italy, Greece and Spain, have not shown any significant increase in their far right movements. One could think that in those countries, support for the far right would have grown enormously these last few years, perhaps feeling the threat of foreigners, but it seems that their support and humanity lie with helping those in need. On the other hand, countries which have categorically refused to participate in the allotment of refugees, such as Poland, Hungary and the Czech Republic, have shown a significant rise in the far right. These countries have hardly accepted any refugees at all. The UN has in the past condemned the Czech Republic's response to the refugee crisis, mainly affecting those from Syria, as reprehensible and a violation of human rights, detaining them for months – children included – and even charging them $10 a day, as a way of deterring them. Border police have even marked the forearms of migrants with numbers, much like Nazis did in concentration camps or the way cattle are marked, earning the outrage of human rights groups. Hungary has treated refugees in an inhumane manner as well, prompting an EU foreign minister for Luxembourg to propose Hungary's expulsion from the EU.

Moreover, it is noteworthy that these very countries are also the ones whose own nationals sought asylum or continue to seek work in other countries. Poles, for example, represent the largest foreign-born group in the UK. And apart from those born in Poland, shown on the chart below, there are those who are descendents of the 200,000 Polish migrants who arrived in the UK after WWII.

And, apart from the UK, there is a growing number of Poles seeking opportunities in some other EU countries:

They are one of the groups who seek better work opportunities in other countries. Hungarian emigration has seen various waves, at the turn of the last century, for work opportunities, during the 1930s to escape fascism, and during the Soviet intervention, mainly to the US. More recently, many Hungarians have sought employment opportunities in different European countries after Hungary's admission to the EU in 2004. Clearly, the attitude of these countries smacks of hypocrisy, to say nothing of a lack of humanity.

Immigration is such an important and divisive topic that it has driven recent electoral campaigns in various countries recently, such as the US, Austria, the Netherlands and France and has already claimed one EU casualty – namely, the UK in Brexit. And if the response by some EU countries to the migrant crisis is to repel them, refusing to cooperate by sharing the responsibility with others in the EU, and fomenting the far right, whose notions provide inputs to more mainstream governing parties in an attempt to appeal to the voters of the day, then the cohesion of the EU becomes more and more fragile and its future precarious.

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Various:

Concerts, dance, theatre and Los Toros are all about to be dropped to a lower IVA rate of 10% says the Government (cinema tickets to stay at 21%). More at Agent Travelhere.

The former editor of SUR in EnglishLiz Parry receives a British Empire Medal for helping British citizens feel at home in Andalucía (Here). The medal, awarded by Her Majesty Queen Elizabeth II and announced in the New Year’s Honours List in January, was brought to her in her home city of Málaga by the British Ambassador to Spain, Simon Manley. From Business over Tapas come our congratulations.

The Ex-minister for Energy José Manuel Soria has written a memory of his time in office. Among other surprises, he says that the power companies would write and impose their own rules which were expected to be both acceptable to and implemented by the Government. The Periódico de la Energíadoubts if this is true...

FromThe Olive Press: ‘Spain’s waters reached their highest temperatures ever in June. Deep-sea buoys with thermometers have shown they have increased by 2.5C in the last decade alone. The warmest waters were recorded in the Mediterranean of Tarragona, which reached 27C, an increase of 2.5 % on a year earlier, the highest ever in the month of June...’.

The BBC seems surprised to discover that Britons in Spain and Spaniards in the UK are different: ‘...almost 300,000 British citizens were resident in Spain for 12 months or more in 2016, while 116,000 Spaniards were living in the UK. Living near the coast was the most popular choice for UK expats in Spain. Also, 48% of them are retired. That number has increased rapidly in recent years. Spaniards in the UK are mainly from younger age groups (half of them are between 20 and 39)...’. More alarming differences here.

‘Immigrants return to Spain after seven years of crisis-led decline. In a first since 2009, there were more migrant arrivals than departures in 2016 as population grew 0.19%. Spain has become a net recipient of migration once again. In 2016, more people came to live here than left the country – a trend not seen since 2009, when the economic crisis scared away both Spaniards and foreign residents...’. From El País in Englishhere.

Over 137,000 pets were abandoned to their fate in Spain last year says Públicohere.

FromThe Kingdom of Navarra, ‘When the “chupinazo” rocket is fired, the city transforms into an explosion of life. Thousands of people from around the world flood the streets of this city, which is awash with white and red. Over these days the streets are filled with fraternity, happiness and a buzzing atmosphere, marked by the rhythm of the charanga brass bands and the peña social clubs. The bull run is the only moment of the day in which the festivities are paused and tension invades the route minutes before the bulls set off on their race on the heels of the runners. The fiesta continues with the “caldico” consommé, the hot chocolate with churros, the procession, the giants and big heads, the aperitif, the bull fight, and the fireworks that announce the arrival of the buzzing night-life...’. San Fermines: 7–14th June.

An unlikely champion to protest against the lack of Spanish – castellano – taught in schools in the Valencian Community, Norwegian mother of three Kristin Tennebø Holslag from Alfàs del Pi says her youngest child will receive 21 hours a week of valenciano, and just four of castellano. She is interviewed in El Españolhere.

FromThe Olive Press: ‘Spain’s sought-after jamón ibérico has been labelled a ‘massive fraud’ by a leading German newspaper. Some 90% of jamón sold outside Spain is not authentic, according to Süeddeutsche Zeitung journalist Thomas Urban...’.

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See Spain:

Horse riding along Menorca's Camí de Cavalls – photos and story at The Guardianhere.

Can you name a typical Catalan dish? Let Molly of Piccavey help you out here.

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Letters

Hi Lenox, Your item re tourism and Spanish GDP. I recently read an article which stated that the contribution of tourism on GDP in Spain was grossly underestimated possibly for political reasons. The estimated effect of tourism was nearer 25% of GDP, if you then add this to the wealth produced by the expats the figure would be very much higher. Do the Spanish authorities thank us for this? If they do I have yet to see it. John

We 'residential tourists' (sic) certainly put the percentages up, but since we don't make much political impact (besides local elections perhaps), and we have no spokespeople besides the footballer Michael Robinson (heh!), we are usually sidelined and ignored.

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Finally:

The Spanish Top Ten in Internet music sales here. Joaquín Sabina is Nº One with his album Lo niego todo (hit song on YouTubehere).

Business over Tapas 6 July 2017 Nº 216

A digest of this week's Spanish financial, political and social news aimed primarily at Foreign Property Owners: